Below is a short guide to understanding the various acquisition possibilities and strategies that business leaders can pick from

Many people presume that the acquisition process steps are constantly the same, whatever the company is. However, this is a standard misconception because there are actually over 3 types of acquisitions in business, all of which include their own procedures and strategies. As business people like Arvid Trolle would likely verify, one of the most frequently-seen acquisition techniques is referred to as a vertical acquisition. Basically, this acquisition is the polar opposite of a horizontal acquisition; it is where one business acquires another business that is in a totally different place on the supply chain. As an example, the acquirer firm might be higher on the supply chain but decide to acquire a business that is involved in an essential part of their business procedures. Generally, the beauty of vertical acquisitions is that they can bring in brand-new revenue streams for the businesses, along with decrease expenses of production and streamline operations.

Before diving right into the ins and outs of acquisition strategies, the 1st thing to do is have a firm understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one firm purchases either the majority, or all of another firm's shares to gain control of that firm. Generally-speaking, there are about 3 types of acquisitions that are most typical in the business world, as business individuals like Robert F. Smith would likely understand. One of the most typical types of acquisition strategies in business is known as a horizontal acquisition. So, what does this suggest? Essentially, a horizontal acquisition involves one company acquiring a different business that is in the same market and is performing at a comparable level. The two businesses are generally part of the same sector and are on an equal playing field, whether that's in production, financing and business, or agriculture etc. Usually, they may even be considered 'competitors' with each other. Overall, the major advantage of a horizontal acquisition is the increased possibility of enhancing a firm's client base and market share, along with opening-up the opportunity to help a firm grow its reach into brand-new markets.

Amongst the several types of acquisition strategies, there are 2 that people commonly tend to confuse with each other, possibly as a result of the similar-sounding names. These are referred to as 'conglomerate' and 'congeneric' acquisitions, which are 2 very distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in completely unassociated sectors or engaged in different activities. There have been lots of successful acquisition examples in business that have included two starkly different companies with no overlapping operations. Generally, the aim of this strategy is diversification. For instance, in a scenario where one product or service is struggling in the current market, firms that also have a diverse variety of additional products and services have a tendency to be a lot more secure. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired firm belong to a comparable sector and sell to the same sort of customer but have relatively different products or services. Among the major reasons why businesses could opt to do this sort of acquisition is to simply increase its line of product, as business people like Marc Rowan would likely confirm.